Suppose that Merck Inc. currently has no debt and has an equity cost of capital of $14\%.$Merck isconsidering borrowing funds at a cost of $7\mathrm{.}6\%$ and using these funds to repurchase existing shares of stock.Assume perfect capital markets. If Merck borrows until they achieved a debt$-$to$-$equity ratio of $35\%,$ then Merck's levered cost of equity would be closest to:

a$)15\mathrm{.}29\%$

b$)15\mathrm{.}75\%$

c$)16\mathrm{.}29\%$

d$)16\mathrm{.}56\%$